COVID-19 vaccine development will rejuvenate the market, prompting analysts to put their bet once again on sectors that were worst-hit by the pandemic outbreak such as aviation, hotel, cinemas, and banks.
Recently, the US-based pharma company Pfizer announced that it is close to discovering COVID-19 vaccine and entered successfully from phase II to phase II trial. Riding on the news, the market is hoping for recovery for the segments worst-affected by the pandemic.
Pfizer India stocks jumped mid-November, so were Sensex and Nifty, when the pharma company sought emergency authorisation for its COVID-19 vaccine, which they claimed have met in 95 percent efficacy level.
Pfizer and BioNTech, its German research partner, has entered into deals with the US, Japan, and Canada, and began rolling submission for its CoronaVirus vaccine with the EU. It might be a while before lives restore to a pre-COVID situation, but for the time being, things have started to change in some parts of the world and market hoping for a revival in specific segments.
If you are an investor, it might pay you to know which stocks to buy after COVID vaccine because once the vaccine is out, these are the stocks that will rally.
Here are some stocks to buy after Pfizer vaccine.
Indian Hotels Co.
Once life starts to normalise, there will be a boom in leisure travel and high-end business travel. When it happens, the hotel industry will see a quick revival. Indian Hotels is positioned better to perform in the next one-to-two years.
With manageable debt-equity ratio and baking from Tata Group, Indian Hotels may quickly cover the ground it has lost in the last few months. Analysts listed Indian Hotels amid stocks to buy which will also see a push as demand for air-travel goes up.
With restrictions on international and domestic travel relaxing, stock prices for both hotels and airline companies will travel upward.
Movie theatres went vacant for many months, but now they are opening again in several cities. With this, the leaders in the domain will show better recovery over mid-size rivals. Demand will be back with the big movie releasing in the theatres once again.
The financial sector registered mixed performance amid COVID-19, with the larger banks advancing despite gloomy predictions. Most banks reported a positive profit in Q2 reports, even YOY rise in revenue and operational profit. Larger banks are ahead in the race and need to be in your portfolio while the economy is reviving.
COVID Vaccine Will Impact The Pattern Of Investing In The Stock Market
Even after the vaccine is out, COVID is going to leave some permanent impact on the market, including impacting the way investors invest in stocks. Pfizer vaccine is an important announcement for the revival of the market. Travel, leisure, and hospitality stocks have already spiked in the US market, and once the vaccine hits the market, there will be a rapid revival. We can hope to see the market to move in the same direction in India with lockdown regulations becoming relaxed. These are going to be the best stock to buy after the vaccine in the next six months for medium to long-term investment.
Signs In The Economy That Investors Need To Take Into Account
The COVID-19 scenario has been difficult for investors, especially equity investors, as the market has been highly unpredictable. But with the COVID-19 curve flattening, along with the news of possible COVID-19 vaccine, signs of recovery are becoming apparent.
- Jobs are back in the economy. several stalled projects are taking off the floor with a rise in demand
- India’s unemployment rate gets lowered to 6.98 percent from 23.5 percent in April
- Strong performance from the banking and NBFC sector is expected going forward. Several financial and insurance firms registered growth in Q2 result.
- The banking sector has weathered the difficult time well than expected. Many of the lenders clocked an increase in profit despite moratorium and rising NPA
- Automation and digitisation trends will remain strong with work from home culture rapidly becoming mainstream, offering tailwind to the new-age digital sector
- Analysts believe that top companies have a larger headroom and chances of recovery over smaller and medium competitors
- There will be short term blips, but it will not affect the long-term recovery trajectory for sectors that were affected by COVID once the vaccine announcement happens
Going forward, economy linked sectors will perform in the long run over defensive sector stocks. Market analysts predict stronger recovery for hotel, travel, and aviation segments but have also issued a warning regarding small and medium-sized competitors for long-term profit.
Investors need to clear their understanding on which stocks to buy after COVID vaccine to plan their future investment roadmap. Based on recommendations, historical data, and technical indicators, they can prepare themselves better to take on the opportunities as they arise.